Posted by AzBlueMeanie:
If "Luffa Boy" Bill O'Rielly want to talk about "terrorism," them let's talk about actual terrorism, the economic terrorism perpetrated by Tea-Publicans in Congress taking America hostage to their radical agenda using the federal debt ceiling and default as leverage. Their economic terrorism already resulted in a downgrade of the credit of the United States for the first time in our history after their last terrorist act of hostage taking over the federal debt ceiling.
The TanMan, Weeper of the House John Boehner, spoke at the Peter G. Peterson Fiscal Summit on Tuesday. For the politically uninitiated, Peter Peterson is a right-wing ideologue who runs a foundation dedicated to the purpose of ending social security and Medicare. The 'very serious people" of the D.C. Media villager crowd treat Pete as a "very serious person" on the subject of "entitlements," but let's be clear, Pete is a right-wing ideologue who would end social security and Medicare. He believes in an "ownership society" -- "You're on your own, Grandma! Suck it!"
"We shouldn’t dread the debt limit," said Speaker John Boehner... "We should welcome it. It’s an action-forcing event in a town that has become infamous for inaction." (Maybe he should talk to his counterpart in the Senate, the Septegenarian Ninja Turtle Mitch McConnell, who has rendered the Senate dysfunctional with his constant abuse of the filibuster rule).
Ezra Klein writes at Wonkbook: Of course Boehner wants another debt-ceiling showdown:
[Boehner's] comments have been the occasion for much wailing and gnashing of teeth, as if anyone, anywhere, believed that the Republicans' 2011 debt-ceiling antics were some sort of one-off. But Boehner was clear on Tuesday. "I will again insist on my simple principle of cuts and reforms greater than the debt limit increase," he said.
Of course he will. For one thing, it worked well for him in 2011. Republicans got more than $900 billion in immediate spending cuts, as well as $1.2 trillion in triggered spending cuts -- though they don't much like the $500 billion or so of those cuts scheduled to fall on the Pentagon. They also drove President Obama's approval ratings beneath 40 percent. And while I'm not one who thinks Republicans intentionally tank the economy to undermine Obama [Ezra is naive], there's little doubt that the effect of the debt-ceiling debacle was to set back the recovery, brightening Republican prospects and darkening Democratic ones. The fact is that it's easier to be sanguine about economic showdowns when you're not the ones in charge.
For another, it's Boehner's only option in 2012. The Democrats, for once, have nothing but fiscal leverage. They've got the expiration of the Bush tax cuts, which all Republicans would hate and many Democrats would welcome. They've got the aforementioned spending trigger, which Republicans really have begun to fear for its cuts to defense spending. They can do nothing -- or, more likely, offer Republicans a deal they can't accept -- and the resulting paralysis will swing fiscal policy far, far, far to the left. Threatening to default on the national debt is Boehner's only piece of counter-leverage.
So of course Boehner will try and use the debt ceiling as leverage again. And again. And again. It's pretty clear that, at this point, there's no going back to the time when debt-ceiling increases came smoothly. If I were the market, I'd take the fact that the leader of one of the two parties has publicly said that he "welcomes" debt-ceiling showdowns as evidence that the United States is almost certain to default on its debt -- if only temporarily -- within the next decade or so.
The question is what, aside from complain, Democrats and the business community will do to stop him. Somehow, the debt ceiling needs to be taken off the table once and for all... (Bill Clinton, for instance, argued that Obama should invoke the Fourteenth Amendment -- which says "the validity of the public debt of the United States ... shall not be questioned" -- to raise the debt ceiling unilaterally).
Ezra Klein continues in a later post, Boehner’s debt ceiling crisis would be so much worse than you think:
There’s some chance that House Speaker John Boehner’s threat to provoke another debt-ceiling crisis doesn’t much matter. If it does matter, it’s only because fiscal policy has already gone very, very wrong.
As Treasury Secretary Timothy Geithner said Tuesday, “we’re likely to hit the debt limit sometime before the end of the year, but Congress has given the executive branch a set of tools that buy them some time. And those tools will probably take us into the early part of 2013, thus separating somewhat the timing of the expiry of the tax cuts and the sequester with the ultimate need for Congress to act on the debt limit.”
In other words, the Bush tax cuts expire on Dec. 31. The automatic spending cuts begin on Dec. 31. The debt ceiling likely won’t come due till February, or perhaps even March. So the scenario in which we reach a debt ceiling showdown is a scenario in which the two parties have already failed to come to an agreement on spending and taxes.
That is to say, it’s a scenario in which we’ve already reached the fiscal cliff and fallen over the edge. It’s a scenario in which the Bush tax cuts have probably expired, and the spending cuts have probably begun. It’s a scenario in which the markets are already in some amount of turmoil, and the forecasters are already sharply warning that Congress is dragging the country into a double-dip recession. It’s a scenario in which the two parties are already under tremendous pressure, in which Washington has been in some sort of semi-crisis for months, and in which all the possible deals have already been tried and failed. (It’s also a scenario, incidentally, in which our projected deficits are much lower, because our expected tax revenues are so much higher.)
* * *
That’s not a scenario that looks like August 2011, when the debt ceiling was the only thing on the docket. It’s an economic crisis that looks more like September 2008, when Lehman was collapsing. And in that world, it’s so hard to predict the resulting financial chaos, public outrage, interest group pressure, and political terror that it’s almost impossible to say anything about how the crisis would be resolved, or who might benefit.